US producer prices moved up a steep 0.6 per cent last month as energy, tobacco and vehicle prices rose.
Stripping out volatile food and energy costs, the Labor Department's producer price index - a gauge of prices received by farms, factories and refineries - rose 0.3 per cent.
Wall Street economists had forecast a 0.4 per cent rise in April producer prices, and a 0.2 per cent gain excluding food and energy costs. The higher-than-expected increases were likely to keep inflation worries alive in financial markets.
Energy prices rose 2.1 per cent last month, a bit slower than in March. If that gain were stripped out, producer prices would have risen just 0.1 per cent.
Over the past 12 months, energy costs are up 15.9 per cent, reflecting a big run-up in the cost of crude oil. Oil prices hit a record high above $58 a barrel in early April but quickly retreated.
Yesterday, US crude oil futures settled at $48.61. The report showed a 1.2 per cent jump in cigarette prices, a 0.5 per cent rise in the cost of cars and a 0.6 per cent gain in prices for light trucks and SUVs.
Food prices rose a mild 0.1 per cent. The department issues a report on consumer prices tomorrow.